IQ Spring 2018

Spring 2018 Finally it has come to a stop. The goose has been cooked. The canary has croaked. The party is over. The fat lady has sung and the curtain has come down. The last person out has indeed turned out the lights. The rattling train has come to a halt.

It doesn't matter how you say it. It is finished. It's done. Finito. The End.

The end of what?

The end of the longest and strongest soft market in history? Surely not?

Well, if not the end, the beginning of the end.

Perhaps we have spoken too soon. We shouldn't dare even whisper it.

The last person to make this call was stuck down by a mysterious bolt of lightning and died, gibbering, charred and in agony as his distraught and helpless family looked on.

But, somehow we will pluck up the courage to mouth the words in defiant Trappist silence:

"It's the end of price declines."

And in moments of mindfulness we find ourselves doodling the words "no more discounts" in the margins of our jotters.

The blood has finally hit the streets and we have recognised some of it as our own. It has been a moment of grim, lucid realisation. An epiphany.

The junkie finally knows he is addicted and has decided to seek help before he sells the last of the family silver.

We know we need to act and only tough choices are going to work. We have rediscovered the will to stand up for ourselves and say no.

As this opioid affliction took hold of us over the past decade, we tried every piece of exotic financial engineering in the book.

We got into ILS asset management and ran sidecars. We diversified into specialty, casualty, E&S, credit and mortgage reinsurance. We did some synergy deals. We backed MGAs and binders. We went to Lloyd's. We pushed new lines like cyber and M&A insurance. Eventually we ran out of options and the losses came. We started to waste away.

But we would still do anything to ease the pain and the creeping anxiety, that butterfly feeling in the stomach that told us we were somehow going to lose all our friends if we didn't carry on with the party. But, it is so hard to say no.

Sometimes it seems that willpower alone is not enough. We fear we will fall off the wagon and then we may overdose with tragic consequences.

I once heard an amazingly candid interview with a doctor who specialised in palliative care for attempted suicide cases. He said the hardest part of the job was not dealing with sudden death. The saddest cases concerned those who had overdosed massively on standard household paracetamol painkillers. These victims were conscious and indeed many of them had recovered the will to live after their cry for help.

The trouble was that they had suffered liver failure and were condemned to a slow death. There was nothing he could do for them other than make them comfortable as the inevitable end approached.

And so it will be for some of us.

For an unlucky few the sad consequence of a decade of abuse of our vital organs is already a nailed-on certainty. The rediscovery of puritanical virtues will have arrived too late. Our fate is already sealed from the vast quantities of poison we ingested in prior years.

And we haven't even asked for more yet. We still can't bring ourselves to do that. We are still too scared and too weak. That will have to come another day when we have weaned ourselves off this awful drug.

To read the Spring 2018 issue of IQ, please click here.

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